November 14, 2008

Erfurt, Germany: Ersol Presents Nine Month Results 2008

In the first nine months of the current financial year ersol Solar Energy AG (ersol) increased its consolidated revenue to € 214.6 million. This corresponds to an increase of 101.5 percent compared with the corresponding period of the previous year (9M 2007: € 106.5 million).

This considerable growth is mainly attributable to the planned additional supplies of silicon and wafers and to the successful utilization of the newly created production capacities. The distribution of revenue illustrates the growing importance of international markets for the ersol Group. The export ratio was 63.1 percent, corresponding to an increase of 16.7 percentage points compared with the previous year (9M 2007: 46.4 percent). Compared quarter-over-quarter, the ersol Group increased its revenue from € 36.7 million in Q3 2007 to € 84.8 million in 2008, corresponding to an increase of 131.1%.

At € 46.1 million the operating result (EBIT) almost tripled (9M 2007: € 16.0 million). EBIT as of 30 September 2008 was thus more than double the EBIT generated in financial year 2007 as a whole. The EBIT margin therefore increased to 21.5 percent year-on-year (9M 2007: 15.0 percent), or 43.3 percent in relative terms, with the result that the ersol Group exceeded its target EBIT margin of 20 percent in the first nine months of 2008. This positive trend is attributable, among other things, to lower preproduction costs in the Wafers and Solar Cells segments, economies of scale and to the revenue generated for the first time in the reporting period by ersol Thin Film GmbH.

Earnings after taxes (net profit) amounted to € 27.4 million in the first nine months of 2008 and were thus up by 294.7 percent compared with the same period of the previous year (9M 2007: € 6.9 million). The achievement of the target EBIT margin and the substantial growth-related improvement in earnings make the first three quarters of 2008 the most successful reporting period in ersol's history.

Cash flow from operating activities amounted to € 13.4 million after the first nine months of 2008, thus increasing by € 25.9 million in the third quarter of 2008 compared with € -12.5 million in the first six months. Year-on-year cash flow from operating activities increased by 113.2 percent (9M 2007: € 6.3 million). The change from the previous year is mainly due to the expansion of business with a disproportionate increase in revenue compared with material and personnel expenses, and thus to an improvement in the operating result.

Basic earnings per share amounted to € 2.69 in the reporting period; diluted earnings per share amounted to € 2.68. The corresponding results for the previous year thus increased by 289.9 percent and 288.4 percent, respectively (9M 2007: basic earnings per share € 0.69; diluted earnings per share € 0.69).

In the first nine months of 2008, and over the remaining course of the current financial year, capacities in the Wafers and Solar Cells segments shall be expanded further. At the end of the year Wafers will have a nominal capacity of 180 MWp; crystalline solar cell production will have 220 MWp and ersol Thin Film will have a capacity of 40 MWp.

There has been no real change to the overall forecast for the year after the first three quarters of 2008.

"Revenue and profit grew continuously in the previous quarters due to the planned increases in raw materials supplies and the rise in production volumes. We are anticipating another slight increase in the fourth quarter. The expansions of capacity currently underway in all segments and the start of production of thin-film technology progressed well. Due to delays in customer projects as a result of the financial market crisis, among other things, the sale of thin-film modules slowed down in the third quarter. In spite of this effect, we are holding fast to our sales target of over € 300 million for the whole of 2008," says Holger von Hebel, CEO of ersol Solar Energy AG, speaking about the further development of business.

"We are anticipating an operating result (EBIT) of around € 70 million, which is within the bounds of our previous forecast," continued von Hebel.

Further details about: erSol AG